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First quarter sales leap 19% at Cranswick

By Elaine Watson , 13-Jul-2010
Last updated on 13-Jul-2010 at 14:05 GMT

Pork products giant Cranswick has posted a 19% rise in first-quarter sales to £198m driven by "substantial gains" in fresh pork, bacon and sandwiches.

The firm said the rise reflected organic sales growth of 6% and growth of 13% from CCF Norfolk, which was acquired last June.

Most categories delivered strong growth, reflecting higher volumes, said Cranswick.

While sales of continental products were down due to the loss of a contract with one customer in the fourth quarter of last year, there were "substantial gains" in fresh pork, bacon and sandwiches and continued growth in cooked meats and sausages.

There were also modest increases in pig prices during the quarter, although they remained below the peak of last summer, it added."The impact was absorbed through increased volumes and continued operating efficiencies."

Meanwhile, capital projects remained on schedule, with the Lazenby's sausage facility expansion due for completion over the summer and the Hull fresh pork development due for completion in the autumn.

The firm, which notched up a 26% rise in pre-tax profit to £43.8m on sales up 22% to £740m in the year to March 31, has invested £94m in its facilities over the past five years.

When the redevelopment of the primary pork processing facility at Preston is completed later this year, it will lift production capacity by 50%.

Volume gains

Investec Securities analyst Nicola Mallard said: "Excluding CCF Norfolk, the organic revenue progress was a solid 6%; the main driver has again been volume as opposed to price. In fact, the group estimates that price/mix has been around -2%, suggesting 8% volume progress."

She added: "The revenue number is comfortably ahead of the lacklustre growth we have seen reported by the food retailers of late and also ahead of Cranswick's previous quarter."

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